Elimination Period

Elimination Period

In disability income insurance or loss of income insurance, the period of time that must transpire before the insurer begins to make payments covering the claim. That is, if one suffers an injury or a long term illness that results in substantial loss of income, the insurance policy sets an elimination period, at least in part to ensure that the disability or sickness is in fact long-term. The elimination period is often thought of as the deductible for disability and loss of income insurance as the policyholder is responsible for expenses incurred during it. For the disability income insurance run by the Social Security Administration, the elimination period is five months. Private plans often include 90-day periods, or shorter periods in exchange for higher premiums.

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Elimination period. If you have disability insurance or long-term care insurance, there's a waiting period, called the elimination period, from the time you become disabled, or are certified in need of long-term care, and when you begin receiving benefits.

You often have a choice of elimination periods -- such as 30, 60, or 90 days -- when you purchase the insurance, though sometimes the payment gap is dictated by the terms of the policy.

In general, the shorter the elimination period the higher the premiums will be for comparable coverage.